Brutal quarter for Nikon

Started Feb 7, 2013 | Discussions thread
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Brutal quarter for Nikon
Feb 7, 2013

From Bloomberg news:

Nikon Plunges Most Since 1985 After Forecast Cut: Tokyo MoverFeb 6, 2013 5:59 PM PT - Mariko YasuBy 
Nikon Corp., Japan’s third-biggest camera-maker, plunged the most since 1985 in Tokyo trading after cutting its profit forecast because of slowing demand in Europe and falling prices.
The company dropped as much as 19 percent to 2,139 yen, headed for the lowest since Nov. 21. The stock traded 18 percent lower at 2,156 yen as of 10:25 a.m., the biggest decline among members of the Nikkei 225 Stock Average.
 of 60 billion yen, the Tokyo-based company said yesterday in a statement. Prices of entry-level single-lens reflex cameras have tumbled since mid-November because of slowing demand and rising competition, it said.forecastNet income will probably be 38 billion yen ($407 million) in the year ending March, compared with a previous 

Canon last month forecast profit will rise 14 percent in 2013, helped by a weaker yen and rising sales of its more expensive models.

Nikon also cut its second-half dividend estimate to 12 yen from 22 yen. The camera-maker had been expected to make a full- year profit of 61 billion yen, based on the average of 20 analyst estimates compiled by Bloomberg.

Chinese demand was dented as consumers boycotted Japanese goods in the period because of protests sparked by a territorial dispute.

Global shipments of digital cameras fell 14 percent in value in November from the previous month, according to the Camera & Imaging Products Association in Tokyo. Shipments of high-end models with interchangeable lenses recorded a 12 percent decline. That followed a 6.6 percent gain in October, according to the industry group.

“Demand in Europe is starting to slow,” Chief Financial Officer Junichi Itoh told reporters yesterday. Business in China was also “worse than expected” in the past quarter, he said.

Nikon trimmed its full-year unit sales target for SLR cameras to 7 million units from 7.1 million earlier. The estimate for lenses was lowered to 9.8 million from 10 million. The company kept unchanged its target for compact cameras at 17 million units.

Sales Forecasts

Nikon and rivals including Canon Inc., the world’s largest camera maker, are relying more on high-end cameras with interchangeable lenses for growth as more consumers use smartphones for snapshots, undermining demand for compact models.

“It was a large downward revision and a negative surprise,”Hisashi Moriyama, an analyst at JPMorgan Chase & Co. in Tokyo, wrote in a report yesterday. “It would take a quarter or two to confirm whether Nikon can improve its average selling price and margin,” said the analyst, reducing the price target for the stock by 19 percent to 2,600 yen and lowering his rating for the stock to “neutral” from “overweight.”

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